Sharp drop in world output improves price outlook:
Benchmark May raw sugar futures rose to a 3-1/2-month high of 13.42¢/lb in February 2019 with fund short covering against the backdrop of gains in crude oil, which hit 2019 highs, helping fuel the advance in sugar. Higher oil prices increase the profitability of ethanol production in Brazil, which in turn could keep the expected rise in sugar production in Brazil's Centre/South in 2019/20 in check. May white sugar also hit a 3-1/2-month peak of USD361.60 a tonne.
It is against this background that we present our quarterly update of the world sugar production estimate for 2018/19 on a local crop year basis. Our numbers indicate that global production in 2018/19 may fall by 15.0 mln tonnes to 186.2 mln. This would be a slightly smaller drop than the 15.5 mln tonne reduction assumed in November. This is due to an upward revision of the crop out-look in India and Brazil which more than offset some reductions else-where including a 260,000 tonne reduction for the European Union.
Click below to access our insightful update of the world sugar production estimate for 2018/19 (on local crop year basis). Access our World Sugar Production forecasts including both regional and country specific highlights notably the BRICS, African growing economies including Egypt and Ethiopia as well as North America and Central America's largest producers namely the US, Mexico and Guatemala.